“We think there is a fundamental misconception about piracy,” Newell said. “Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24/7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country three months after the U.S. release and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable.

“Most DRM solutions diminish the value of the product by either directly restricting a customer’s use or by creating uncertainty.”

He adds, “Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.”

Years ago, when I released a book, I was told to do DRM. Instead, I released the book as a normal PDF. I did print a serial number and a first name across the bottom of each page. It worked. My work was never pirated. The reader experience was not impacted. They could read my book with any PDF reader, anywhere, at any time with or without an Internet connection. I did not print the serial number across the page in an annoying way either. I just printed it at the bottom. I reasoned that if anyone wanted to take the book and go through each page in Photoshop or Adobe Acrobat and erase the serial numbers, then they had done enough work to earn the right to steal it. I say; more power to them. The thing is, it never happened. Why? This is because I had replicated the ease of access to my product. Amazon does the same thing with their Kindle. Of course, the Kindle is still a walled garden with a proprietary format. If they want, they can erase all of your books. Worse, if they went out of business, all of your books would disappear. But they created the illusion of near universal freedom. I buy my books on my Kindle or Amazon. I read them on my Android phone, on my Mac, on my PC, or on the reader itself. In short, I can read the books anywhere. Better yet, it keeps track of where I was and syncs to the proper page for me. That’s value I wouldn’t get if I stole the book. I would have a static file that would have no idea what page I’d read up to. That diminishes the attractiveness of piracy because I have the same access I would have if I stole the book. Even better, I get additional value.

The music industry could learn a lot from Gabe and me and Amazon. They recently fostered a study and got back results they didn’t like so they buried them. The study showed that the pirates were Big Music’s biggest customers. They were 10 times more likely to buy music then people who don’t download songs illegally. The music industry’s problem has always been a shitty product. They insisted on selling albums of songs when people only wanted one or two tracks. They engaged in price fixing. They bullied artists. They dragged ass on delivering a digital download platform and forced people to consume music in a way they no longer wanted to, with physical media. Now, as Malcolm X said, “the chickens have come home to roost.” Piracy is not a price problem. It is a shitty product problem. It’s an outmoded business model problem. It’s shortsightedness and an inability to change problem. DRM is always about locking in old business models and denying people what they want.